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The banded coral shrimp, Stenopus hispidus (Crustacea: Decapoda: Stenopodidea) is a popular marine ornamental species with a circumtropical distribution. The planktonic larval stage lasts ∼120–253 days, indicating considerable dispersal potential, but few studies have investigated genetic connectivity on a global scale in marine invertebrates. To resolve patterns of divergence and phylogeography of S. hispidus , we surveyed 525 bp of mitochondrial cytochrome c oxidase subunit I (COI) from 198 individuals sampled at 10 locations across ∼27,000 km of the species range. Phylogenetic analyses reveal that S. hispidus has a Western Atlantic lineage and a widely distributed Indo-Pacific lineage, separated by sequence divergence of 2.1%. Genetic diversity is much higher in the Western Atlantic ( h = 0.929; π  = 0.004) relative to the Indo-Pacific ( h = 0.105; π  < 0.001), and coalescent analyses indicate that the Indo-Pacific population expanded more recently (95% HPD (highest posterior density) = 60,000–400,000 yr) than the Western Atlantic population (95% HPD = 300,000–760,000 yr). Divergence of the Western Atlantic and Pacific lineages is estimated at 710,000–1.8 million years ago, which does not readily align with commonly implicated colonization events between the ocean basins. The estimated age of populations contradicts the prevailing dispersal route for tropical marine biodiversity (Indo-Pacific to Atlantic) with the oldest and most diverse population in the Atlantic, and a recent population expansion with a single common haplotype shared throughout the vast Indian and Pacific oceans. In contrast to the circumtropical fishes, this diminutive reef shrimp challenges our understanding of conventional dispersal capabilities of marine species.